Little by little
Whilst it remains unclear as to when non-essential retailers can re-open in the UK, it is vital to use this time to plan and consider ways that store operations must adapt.
In this article we look at ways in which `essential’ retailers have modified their in-store operations, in addition to the actions of retailers in countries who are further along the curve. Retailers should also pay close attention to government and the BRC's advice on social distancing measures for retail outlets permitted to remain open, which aim to help protect both staff and customers and limit the spread of the virus.
Retail destinations
A key challenge for retail destinations will be recovering footfall, as consumers have had to alter their shopping behaviour to heavily rely on online shopping and home delivery. However, initial results seen in other countries show promise, including Ingka, who own the IKEA brand and 45 global shopping centres, who claim their reopened shopping centre in Germany saw footfall bounce back to c. 60%, with c. 70% of tenants re-opening for business.
After an extended period of isolation, shoppers will also likely be cautious and will seek greater levels of protection from the virus. Improved hygiene measures throughout retail destinations, such as antibacterial hand sanitiser at entry and exit points and pop-up handwashing stations will help to recover consumer confidence. As will improved click and collect services, such as limiting human interaction and scan-and-go services, as well as the opportunity for a centralised click and collect store, where shoppers can collect multiple retailer orders in one location. These types of measures should be promoted, such as through shopping centre apps and on social media, helping to provide reassurance to shoppers.
The open plan, spacious layouts at traditional retail parks will make social distancing measures easier to implement as opposed to large, covered shopping centres. The big-box nature of many retail park units can be adapted to ensure 2 metres are kept between shoppers and staff and outside facing store entrances provide space for organised queuing systems. Next is one of the first major UK retailers to propose reopening plans, where they will prioritise the opening of large, out-of-town stores to enable such measures to be in place.
On the other hand, social distancing measures in shopping centres will require greater management, including manned entrances, as seen in grocery and hardware stores, in addition to the need for queuing systems for individual stores. In many first and second-tier cities in China, shopping centres are appointing security at mall entrances checking customer health, as well as thermometer machines to monitor temperatures.
F&B outlets
Whilst many F&B operators are adapting in the short-term through switching to a purely takeaway and delivery service, uncertainty over the future presents key challenges for an industry that already runs on low profit margins. National F&B operators have reacted with caution and are focusing efforts on trial reopenings.
This includes the reopening of 100 KFC restaurants from this week, following a trial, with limited menus and delivery only options, focused in areas of high demand. Pret a Manger have reopened a limited number of London branches in the last few weeks, and changes include Perspex screens at till points and limited food menu and opening hours. Greggs had planned to trial the reopening of 20 outlets in Newcastle from this week with new safety measures in place, however they have postponed this plan due to concerns of crowds and will continue to run trials behind closed doors for the time being.
However, the prospect of reopening dine-in restaurants presents wider issues, including constrained capacity and fewer covers (i.e. tables spaced 2 metre apart, reducing capacity), increased costs (from higher cleaning and protective clothing costs) and heightened consumer caution raising significant concern for the industry. Restaurants will be put under severe cost pressure from social distancing measures, as well as operational issues including means of taking orders and serving customers.
Likely impacts will result in closures of less financially stable restaurants, such as those who were already facing cash flow shortages and releasing profit warnings prior to the pandemic. The high-end dining sector is also likely to take a considerable hit, with the key attraction being the restaurant ambience and experiential offer, rather than a food offer suitable for home delivery.
It is uncertain when non-essential retailers and eat-in restaurants will be able to reopen in the UK, and once the case, it will likely be a slow road to recovery to `normal' levels of trading, as lockdown measures are gradually lifted. Consumers will likely remain cautious and show resilience for some time and consideration must be given to how quickly full store and restaurant portfolios should reopen.
Sophie Pisano